⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
POLYCAB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.3
| Stock Code | POLYCAB | Market Cap | 1,02,671 Cr. | Current Price | 6,819 ₹ | High / Low | 7,948 ₹ |
| Stock P/E | 39.6 | Book Value | 697 ₹ | Dividend Yield | 0.51 % | ROCE | 29.7 % |
| ROE | 21.4 % | Face Value | 10.0 ₹ | DMA 50 | 7,319 ₹ | DMA 200 | 7,029 ₹ |
| Chg in FII Hold | 0.86 % | Chg in DII Hold | -0.57 % | PAT Qtr | 618 Cr. | PAT Prev Qtr | 675 Cr. |
| RSI | 37.3 | MACD | -172 | Volume | 1,33,531 | Avg Vol 1Wk | 3,49,442 |
| Low price | 4,555 ₹ | High price | 7,948 ₹ | PEG Ratio | 1.22 | Debt to equity | 0.01 |
| 52w Index | 66.7 % | Qtr Profit Var | 36.4 % | EPS | 172 ₹ | Industry PE | 17.9 |
📊 Core Financials
- Revenue & Profitability: Strong quarterly PAT of ₹618 Cr, though slightly lower than previous ₹675 Cr. EPS at ₹172 indicates solid earnings power.
- Margins: ROCE at 29.7% and ROE at 21.4% reflect efficient capital usage and strong profitability.
- Debt Ratios: Debt-to-equity at 0.01 shows negligible leverage, enhancing financial stability.
- Cash Flows: Healthy operating cash generation implied by consistent profitability and low debt.
💹 Valuation Indicators
- P/E Ratio: 39.6, significantly higher than industry average of 17.9, suggesting premium valuation.
- P/B Ratio: Current price ₹6,819 vs. book value ₹697 → ~9.8x, indicating expensive relative to assets.
- PEG Ratio: 1.22, fairly reasonable, showing growth-adjusted valuation is not excessive.
- Intrinsic Value: Based on earnings and growth, intrinsic value appears lower than CMP, suggesting overvaluation in short term.
🏢 Business Model & Competitive Advantage
- Leading player in wires & cables with diversified product portfolio including FMEG (Fast Moving Electrical Goods).
- Strong brand presence and distribution network across India.
- Competitive advantage lies in scale, brand trust, and efficient capital structure.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: Attractive accumulation range between ₹5,800 – ₹6,200, closer to support levels and below DMA200.
- Long-Term Holding: Strong fundamentals, negligible debt, and industry leadership make it a good long-term compounder despite current premium valuation.
✅ Positive
- High ROCE and ROE indicating strong efficiency.
- Negligible debt ensures financial resilience.
- Strong brand and market leadership in cables & wires.
⚠️ Limitation
- Valuation stretched with P/E nearly double industry average.
- Quarterly PAT shows slight decline, raising near-term caution.
- Low dividend yield (0.51%) may not attract income-focused investors.
📉 Company Negative News
- Recent quarterly profit dipped from ₹675 Cr to ₹618 Cr.
- Decline in DII holding (-0.57%) indicates reduced domestic institutional confidence.
📈 Company Positive News
- FII holding increased (+0.86%), showing foreign investor confidence.
- Strong 52-week performance with 66.7% index gain.
- Quarterly profit variation of 36.4% YoY highlights growth momentum.
🏭 Industry
- Electrical equipment and cables industry growing steadily with infrastructure and housing demand.
- Industry PE at 17.9, showing sector is generally undervalued compared to Polycab’s premium valuation.
🔎 Conclusion
- Polycab is financially strong with excellent return ratios and negligible debt.
- Valuation is stretched, making near-term upside limited.
- Best suited for long-term investors who can accumulate during dips in the ₹5,800 – ₹6,200 range.
Would you like me to also prepare a comparative HTML report showing Polycab versus its closest competitors (like Havells or Finolex) so you can see relative strengths and weaknesses side by side?